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This document consists of two slides from a KPCB presentation titled 'USA Inc. | What Might a Turnaround Expert Consider?', bearing a House Oversight Bates stamp. The slides provide a macroeconomic analysis of US Federal Revenue growth versus Real GDP growth between 1965 and 2005, noting that Social Insurance taxes grew faster (5%) than GDP (3%). The text questions the impact of corporate tax rates on global competitiveness and whether social insurance tax growth should align more closely with GDP.
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| Location | Context |
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Key Quotes (3)
"Total USA Inc. revenue (collected via taxes) has grown at an average 3% annual rate, in-line with 40-year GDP growth rate."Source
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Quote #1
"Social insurance taxes (for Social Security and Medicare) have grown at an average 5% annual rate, above the 3% GDP growth."Source
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Quote #2
"How crucial is the role played by lower relative tax rates – especially for corporations – in stimulating job and GDP growth...?"Source
HOUSE_OVERSIGHT_020954.jpg
Quote #3
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Revenue Growth: Average Federal Revenue (Driven by Taxes)
In-Line With GDP Growth
In-Line With GDP Growth
1965 – 2005 USA Real Federal Income Growth by Category vs. Real GDP Growth
Revenue Growth
1965 Y/Y | 2005 Y/Y | 40-yr CAGR | '05 vs 40-yr Variance | Comments
1965 Y/Y | 2005 Y/Y | 40-yr CAGR | '05 vs 40-yr Variance | Comments
Individual Income Taxes | 11% | 11% | 3% | 8% | Individual & corporate income taxes are cyclical; 2005 Y/Y growth were significantly affected by economic recovery post 2001 recession.
Corporate Income Taxes | 15 | 43 | 2 | 41
Social Insurance Taxes | 12 | 5 | 5 | 1 | Social insurance taxes & other fees are less cyclical. Social insurance taxes grew significantly faster than GDP.
Other Taxes & Fees | -5 | 1 | 1 | 0
Total Federal Revenue | 9% | 11% | 3% | 8%
Real GDP | 7% | 3% | 3% | 0%
"Normal"
Note: All data are inflation adjusted using GDP price index from BEA; '05 vs. 40-yr variance is rounded.
Data source: White House Office of Management & Budget.
KPCB | www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 225
Data source: White House Office of Management & Budget.
KPCB | www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 225
Revenue Growth: Observations from Previous Slide
We chose a 40-year period from 1965 to 2005 to examine 'normal' levels of revenue and expenses. We did not choose the most recent 40-year period (1969 to 2009) as USA was in deep recession in 2008 / 2009 and underwent significant tax policy fluctuations in 1968 /1969 and subsequently many metrics (like individual income and corporate profit) varied significantly from 'normal' levels.
Total USA Inc. revenue (collected via taxes) has grown at an average 3% annual rate, in-line with 40-year GDP growth rate. Corporate taxes have – on average – grown at 2% annually over 40 years. Social insurance taxes (for Social Security and Medicare) have grown at an average 5% annual rate, above the 3% GDP growth.
Questions:
1) How crucial is the role played by lower relative tax rates – especially for corporations – in stimulating job and GDP growth and helping American maintain / gain / constrain loss of global competitive advantage?
2) Should social insurance tax growth be more closely aligned with GDP growth?
Note: All data are inflation adjusted using GDP price index from BEA; '05 vs. 40-yr variance is rounded.
Data source: White House Office of Management & Budget.
KPCB | www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 226
Data source: White House Office of Management & Budget.
KPCB | www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 226
HOUSE_OVERSIGHT_020954
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